2015-04-24 Blue Bottle Coffee arrives in Japan!

James Freeman , Founder & CEO

Blue Bottle Coffee

Interview Conducted Wed, January 14, 2015 8 – 9 am (JST)

1.       In various sources, including a Japanese blog that introduces outstanding San Francisco restaurants, Blue Bottle Coffee is referred to as the Apple of coffee. What are the origin and meaning of this connection to Apple, Inc.? How is Blue Bottle Coffee similar to Apple? How is your organization different?

I’m flattered that Blue Bottle Coffee has been compared to Apple because it is the largest company in the world in terms of revenue. I will begin by explaining how we are different. First, we are tiny. We do not scale in the way that Apple can scale their operations. I think we are more different than similar.

But I think people respond to us in the sense that we are Apple like because we are unencumbered by a lot of distractions the way Apple is. We are very focused on our people and our coffee the way Apple focuses on their people and technology. They also make everything deceptively simple. Tables in Apple stores look like a beautiful piece of maple furniture, but they are filled with infrastructure including security devices, a power supply, and internet connections, all elegantly tethered together in a single cord underneath every table. I am inspired by this simplicity. Perhaps that is why Blue Bottle has been compared to Apple.

2.       How did you conceive of the product name? What is its significance?

The Blue Bottle, located in Vienna, was the name of Central Europe’s first coffee house. We have a story about it on our website. It’s an apocryphal anecdote about war hero Franz George Kolshitsky. When the Turkish army laid siege to Vienna in 1683, he penetrated Turkish lines to successfully notify Polish troops of the need for their assistance. Driven from the city, the Turks fled, leaving everything behind. Though local residents mistook Turkish coffee beans for camel feed, Koshitsky recognized them as coffee beans from having lived in Arabia. According to legend, Koshitsky purchased the bean with reward money from the Vienna mayor, using them to open The Blue Bottle.

The croissant, also introduced following the siege, is an interesting side note to this tale. Creating the croissant, Viennese bakers celebrated their victory over the Turks by devouring the crescent on their national flag.

3.       You sold your first coffee beans at a farmers market in Oakland around 2002. Since then, Blue Bottle Coffee has grown considerably, expanding into several cities. How have the dynamics and operation of your organization changed during that time? How can you maintain your perfectionist standards now that you are a CEO rather than the owner?

In addition to serving as CEO, I am also one of the owners. Of course, the challenges are no different whether I am 100% owner or 0%. Referring to your question about standards, “maintain” is not an option. The concept of maintaining is a fiction. You are either getting better through ongoing improvements in your sourcing and processing of coffee beans, or you are getting worse. For this reason, I think about improving rather than maintaining. One of the luxuries of this round of investment, the supplemental funds have allowed us to invest in quality. We have added staff in the quality control function, at the green coffee level, and at the training level. People were able to taste this investment before they saw it.

I am concerned about making our coffee better next year than it is this year. I want the company to be focused on continual refinement and improvement. In the past year alone, we have already doubled our quality-control staff, and we are cupping three to four times the coffee. We have also doubled our green coffee-purchasing staff, and we are now flying three to four times as many miles to different countries of origin. Adding trainers and revising the curriculum, we have completely revamped our training department. We are working with our head trainer to roll out that curriculum shortly.

In a way, I feel like I have more control than I ever had because we have the luxury of making these investments. Michael Phillips, previously of Handsome Coffee, which we have acquired, now heads all of our training programs, for example. We acquired the company because they have an amazing team we intend to use to seed improvements in our own coffee. For me and the other investors, improving Blue Bottle Coffee as we grow the company is a priority.

Follow-Up Question:  What was the motivation for the acquisition of Handsome Coffee?

We were looking to expand in Los Angeles, but building a roastery in the city is quite difficult due to regulatory restrictions. The acquisition was motivated by the desire to obtain infrastructure like this, and needed real estate, as well as a great team. The appealing location was also a factor. Many interlinked reasons, including Handsome Coffee’s receptiveness, account for the merger. They were ready for a change. In light of all of these considerations, the acquisition seemed like a natural idea.

4.       What were some of the challenges you faced in founding Blue Bottle Coffee? How did you overcome them?

I still feel like I am facing challenges. I began my career as a classical musician, so I did not know much about business or very much about coffee, for that matter. I knew the type of coffee that I personally liked to drink, and that is what I wanted to produce because I thought other people would enjoy it as well. Challenges related to growing and scaling the vision for our company and for the shops continue.

Most challenges in my career have been more about learning a lot of things I did not know, including learning things about people and how to interact with them; learning about their interests and what they might want; learning about real estate. Every year, I feel like my job is different from the year before. I feel like I make a new start every year. The feeling is sometimes exhausting, but also exciting. However, it’s the life I have chosen because it’s the one I prefer.

5.       Your current wife Caitlin was intimately involved in helping you market your coffee at the Oakland Farmers Market. What is her involvement like now that you are the CEO of a funded company?

She is still our head pastry chef, our culinary director. As such, she develops recipes for Blue Bottle Coffee and teaches our bakery managers how to make the pastries. Caitlin also collaborates with the managers to introduce new products. She works with designers to create suitable packaging and is intimately involved in creating products we serve in our shops. We have pastry kitchens in all of our roasteries in all the regions where we have cafes because I like for everything to be made in our shops. Traditionally, cafes have used commercial bakeries, but I think this model is flawed. Bakery pastries tend not to be very delicious. Because I like delicious pastry, we make our own.

Caitlin is also gifted with a keen sense of spaces. She has a beautiful eye for colors. I like white paints for our shops, and I rely on her eye to select the right types. I depend on her insights just about every day. In this sense, I’ve married well.

6.       Some strategists would conclude that Blue Bottle Coffee is positioned as a snobbish “niche” brand while Starbucks is more “casual.” Starbucks is seen as a middle-market, commodity-driving coffee company; how would you describe your current positioning?

I do not think that our positioning is “snobbish.” The strategists who use these descriptors make me think of people who went to a good college, but have never worked in the industry. I really do not spend a lot of time thinking about Starbucks or other coffee companies. I spend a lot of time thinking about what I want to produce and how we can both surprise and delight our guests with a great experience around beautiful coffee made by someone who is skilled, hospitable, and friendly in an interesting physical space.

I think your description of Starbucks as a middle-market, commodity-driven coffee company is accurate. That’s their cross to bear, so I am not going to talk about them. I am interested in peak experiences. I am interested in providing the most delicious coffee in the most hospitable way in the most beautiful spaces to a wide variety of people.

I believe guests do not usually know what they really want until after they see it or experience it. Had I done market research when I started Blue Bottle Coffee, asking questions like, Do you want coffee that is more lightly roasted than you say you like? Do you want to wait longer than you usually do for it? Do you want to pay a little more for it? No one would have responded yes. That is why I think about execution based on our own standards. We obviously want to listen to guests. But we are more interested in surprising and delighting them with something they did not know that they would love.

7.       In another interview, you noted that you are constantly striving to improve quality, believing that if it is not improving, it is declining. Please describe the process you employ to continuously improve the quality of your product.

We begin at the country of origin. Our coffee buyers fly to different companies, where we maintain long-term relationships with growers. The buyers are cupping coffee, observing the conditions on the ground. These observations include working conditions, healthcare, and access to schools and fresh water, not just the condition of the plants and the coffee cherries. Because the quality of the coffee begins where it is grown, we thoroughly check areas where we grow.

After we contract to purchase coffee, the supplier will send a sample, which we cup. Cupping, by the way, is the industry term for sampling coffee in a regimented way. We score the cupping and log the score. Then, when the shipment arrives by ship a while later, we will cup a sample of that, score and log it, comparing the shipment to the original sample. That gives us a baseline for the coffee. Then, every day, we cup every batch of the coffee scoring on a scale from one to one hundred. This is the cupping score.

We also employ a TTI (True to Intent) score ranging from one to five to describe the extent to which the coffee is behaving the way we want it in the context that we are using it. If we held the Brazil coffee we are roasting for espresso to the same standards as the Kenya we are roasting for Kenes, that would not be an apples-to-apples comparison. But if we juxtapose this TTI score with the logging score, we can assess how the coffee is behaving relative to how we want it to. If we see a decline in the TTI score to below 3.75, we do not serve the coffee. After pulling it, we re-roast it. If the score ranges between 3.75 to 4.25, we will cup it twice to confirm that it is behaving the way we want it. We aim for a TTI score greater than 4.25. We subject every batch we roast in every market to this evaluation process.

At the end of each month, I look at the scores with the QC (quality control) head. Referring to the TTI scores, I determine whether we pulled any coffees, if we are on the borderline with fewer coffees than the month before or more. I also determine if a particular coffee seems to be causing problems or is not lasting as long as we would like in the warehouse. Maybe the coffee is not maintaining the essential qualities it must have to be delicious when we serve it.

Everyone knows how to go back and check previous scores, so at the shop level, staff can confirm quality as well. If the customers receive an espresso that does not delight them, and the baristas are struggling, I can go back and look at the data for that roast date any time. The barista can then go back and flag a coffee.

We currently collect a lot of data. We need to figure out how to streamline it. The process is arduous, but it allows us to continually evaluate our success in roasting and refining. If we are able to catch a bad batch before serving it to customers, I become excited. When I see the scores improve, I become excited.

8.       You have also noted that other business plans you have seen often map out marketing and branding strategies, but do not seem to adequately describe the product. You emphasize the importance of focusing on the product. What specific suggestions can you give for doing so? Do you follow a system for product prototyping or design at Blue Bottle Coffee?

Coffee is our product. You really cannot “prototype” a cappuccino. You can only extract the espresso and steam the milk. For that process, we have a system that aims to continually improve and refine the product and to test our adjustments to our blends. One of our core blends is called Hayes Valley Espresso. We want to make a couple changes in it, so we are going to test it at one of our locations for a week. We want to see how the blend we have made behaves under real-world conditions in a café. We will do limited-run tests in some of our smaller shops in the Bay Area so we can assess how the coffee behaves.

In a broader way, we are prototyping more of the nuts and bolts of our café. It sounds mundane, but we are testing a prototype for a condiment bar. Where should the napkins be? Should they be the first item in the row on the condiment bar, or should they be at the end? We have twelve-ounce lids and eight-ounce ones. Two thirds of our guests order twelve-ounce drinks. For this reason, if these drink lids were closer to the customer in the bar than the eight-ounce lids, would fewer customers accidently take the wrong-sized lid, making them happier in addition to expediting the process? Even with something as seemingly mundane as a condiment bar, there are dozens of details we can discuss, refine, and test. We tend to conduct this sort of experimentation in smaller shops in the Bay Area so that people from our head quarters and I can go there and really see how the changes are working.

9.       You raised $19.7 million in a 2012 funding round and $25.8 million in a 2014 round from diverse investors including Matt Mullenweg, Founder of WordPress; an author; co-founders of several tech-start ups; and skateboarding legend Tony Hawk. Clearly, they believe your business is a worthy investment. Why? What do you think has attracted such a diverse following of investors?

Our investors are all smart, interesting gentlemen. They are looking to make wise investments in interesting and meaningful businesses involving scalable concepts. Having all of your money invested exclusively in tech stocks is probably not a good idea. I think everyone wants to have a diversified investment portfolio. These investors are familiar with Blue Bottle. They are aware of the opportunities in a scalable idea, and they believe Blue Bottle is scalable.

10.   In addition to low-cost, self-service providers like Doutors and Saint Marc Cafes, convenience stores have entered the already-saturated, Japanese coffee market offering ultra-low-cost 100-yen beverages. What makes you confident your planned first store in the Kiyosumi area of Tokyo will succeed? What is your current strategy for expanding in Tokyo and Japan nationally? What is your competitive advantage vis-à-vis other coffee chains? Which companies do you view as competitors?

Actually, I am not confident we will succeed, but I am hopeful! I had a 100-yen Lawson coffee the last time I visited Japan. For basically a dollar, the beverage was surprisingly better than I had expected. To make coffee at that price point that is not totally awful is something of an art. I have respect for such Japanese companies, producing interesting products under stringent economic constraints.

As in the United States, Starbucks paved the way. They created and continue to drive the market that companies like mine are enjoying. In Japan, Starbucks was one of the first non-smoking cafes. People are greeted by friendly hospitality in a luxuriant-looking environment, but Starbucks is not that expensive. What Starbucks has done in Japan and certainly in the United States, is proved a concept, confirmed a latent demand. They’ve trained a lot of customers to be curious about coffee, to have expectations regarding coffee. I believe this curiosity is driving our success in the United States. One in a thousand people who go to Starbucks thinks, “Oh, this is good. I wonder what else is out there?” That’s our opportunity to out-execute them in terms of coffee preparation and quality, hospitality. I think similar opportunities exist in Tokyo.

Our company in Tokyo is different because it is not a joint venture or a licensee. Blue Bottle Japan is 100% funded by the Blue Bottle Coffee in the United States. For this reason, it’s going to have a much more personal stamp on it. It is going to seem like Blue Bottle Coffee in the United States because that is what it is going to be. When I was in Tokyo, I myself interviewed a Japanese man who had lived in the United States to determine if he were the right person to make decorative cupped flowers for the store in Kiyosumi. This is an example of how we are taking a granular interest in the look and feel of our products for our roastery, pastry kitchen, and coffee bar. We aim to provide an authentic, Blue Bottle experience, and we are hoping that guests will take an interest.

We have recently opened our new, beautiful site in Aoyama. I’m excited about this project, which I think will be a lot of fun. I love the building. Our first coffee bar in Kiyosumi, which opened in February, will also serve as the headquarters. Then, in March, we opened Aoyama. During the following months, we will assess whether we were right, whether people are interested. If so, we will continue looking for further opportunities, other locations in Tokyo.

Our Tokyo team consists of three, amazingly competent women: Namiko, Asami and Saki are basically running Blue Bottle Coffee Japan. They have all spent significant time with us here in Oakland, and we have spent a lot of time with them in Tokyo. In a way, they are the three legs holding up the stool. Beneath them, we have hired some store managers from Tokyo, and we have some Americans who speak fluent Japanese. One will be in quality control, another a store manager, and the third, the lead barista. I think Japanese guests served by a young, American barista, possibly with long hair and maybe a few tattoos, speaking refined Japanese, will be surprised and delighted. Our Japanese guests will realize that we are doing our best to meet them where they are.

11.   In previous interviews, you have alluded to traditional Japanese cafés (kissa-ten). What have you learned from them? To what extent does Blue Bottle Coffee reflect the “artisan” mindset characteristics of Japanese kissa-ten?

I love the dedication to perfection I have experienced in the kissaten. They are absolutely certain that the way they are doing things—the way they always have done them and will always do them— is correct. I love the peacefulness, the hushed, tranquil quality of my favorite kissaten. The sensation is quaintly outdated, like going to grandmom’s house. But I just love the feeling that every possible detail that could matter has been carefully taken into account.

At Hatto, one of the kissaten I like, the gentleman warms the saucer the way he warms the cup before placing the cup on it. I admire this perfectionism. I do not want to open a chain of kissaten because I prefer a more modern approach. But I think that you are correct in pointing out the artisanship of the Japanese, their dedication to craft. We are from Silicon Valley, so we will measure. We will use scales and thermometers to make our coffee. They are part of our culture. At the same time, we intend to bring the same dedication to craft to the process.

Tokyo coffee is traditionally quite dark, and the shops emphasize a lot of blends. The brewing ratios are very thick. Our preparations techniques will be familiar to customers, but the taste might be a bit lighter, our brewing ratio more limpid. We are going to apply our way of thinking to certain traditional tools, techniques, and ingredients used in Japan.

12.   Japanese people would probably prefer to be seated while enjoying coffee rather than standing.  What are your plans to localize store management in the Japanese market to accommodate such cultural differences?

We have a few tiny stores, kiosks, really. I do not want to rub your face in it, but the temperature was 66 F (18.9C) today here in San Francisco. I had to bring a sweater to work! In this climate, a walk-up kiosk makes perfect sense. In New York, we have a few small venues and a few larger ones with seating.

In our Aoyama shop, a big café, we have about seventy seats. We will also have a richer variety of food offerings. Even at our roastery in Kiyosumi, we will have about twenty seats, as well as some seating outside. The culture has shaped expectations, but not as much as the climate. You would not want to stand outside the roastery drinking a coffee in Japan during August. Nor would you want to stand outside in January. We will adjust the seating to these preferences, but not the drinks. We will apply the same methods and standards as in the United States.

13.   Alluding to the convenient monorail from Haneda Airport to downtown, you have described Tokyo as the way modern, futuristic cities are supposed to be. What else do you like about Tokyo and Japan more generally? What aspects of the country or culture do you not enjoy?

I love the orderliness and regimentation. I always know the side of the escalator for standing and the side for walking. If you are in a hurry on the New York subway, you are in trouble: everyone is standing on both sides of the escalator blocking your path. I love the universal awareness of customs and virtually universal adherence to them. Tokyo is also breathtakingly safe and clean. I do not necessarily feel unsafe in New York or San Francisco, but the environment in Tokyo is definitely remarkably different.

I love Kappabashi with all of the little booths. “There’s the one where you get your stools,” and “There’s the one that sells plastic models of food.” I love the intimate texture, the “smallness” of different districts in vast Tokyo. Even going to Hanto in Shibuya is amazing. It’s one of the busiest train intersections in the world, but if you walk just five minutes, you find yourself in a small, peaceful alley way. You feel like you are a million miles away from the city. I love this “smallness” so characteristic of Tokyo.

I wish I could speak Japanese. Nihongo sukoshi benkyoushiteimasu.

Follow-Up Question:  How do you select staff? How did you instill your values in those you recruit?

I participated in two job interviews just today. I have to sign off whenever a manager is hired. I call or interview candidates in person before signing off. I want to get a feel for the manager. I rarely veto the hiring manager’s decision, but I know I can if I need to. Because I interview each of them, the managers feel as if they are on the inside of things from the very beginning. This sense of belonging has been helpful in cultivating shared values.

Teaching about the product coffee is not difficult. A few months of study, and you are good at it. Unless the role is specialized, like a head roaster position, we de-emphasize the coffee part during our interviews. The difficult task is teaching people to be polite, on time, and considerate. We are looking for people who already embrace these sorts of “eternal” values. We have people coming from fine dining to work with us, and we recently had a manager from a winery join the team.

14.   You did not major in business or economics as an undergraduate, and you do not have an MBA. Do you feel your lack of formal training in business has put you at a disadvantage in any way? If so, how? How do you compensate? Conversely, how have your training and experience as a professional musician contributed to the development of your business?

I feel that not having an MBA has been an advantage. I had twenty thousand dollars and a couple credit cards when I started out. I thought that was plenty of money, so I opened Blue Bottle. Had I known about business, I would have thought, “You can’t start a business with so little capital.” Not knowing what the usual constraints and limitations are has been an advantage in this respect. Additionally, I can hire MBAs. If fact, I have an MBA on the team. Not having been trained in business does not seem to be a constraint, allowing me to have a fresh perspective.

You know that repeating something 1000 times is no big deal when studying classical music. It’s simply part of a daily practice session. But for people who are not accustomed to this type of discipline, the repetition would be a big deal. Becoming a classical musician requires formidable discipline. In comparison to that discipline, nothing I now do seems all that difficult. My training as a classical musician has definitely benefited me in developing the business.

15.   Based on your experience, what is your advice how to successfully start and grow a business?

Concentrate on your product. If you are working on your product to improve it and are aware of both its strengths and deficiencies, you are meeting a necessary condition to make your business work. This focus alone may not be sufficient, but it is necessary. The other details can wait till later. I think that embedding yourself in your product is the most important factor, though I believe it is often overlooked.

16.   Have you ever read the book Do What you Love, The Money Will Follow published by Marsha Sinetar in 1989? You have attempted to follow her advice twice. The first time, when you pursued your passion for the clarinet, you appear to have been unsuccessful, but attempt two, pursuing your passion for coffee, has been wildly successful. How would you evaluate Sinetar’s advice in light of your own, personal experience? What did you learn from your first failed experience that helped you succeed the second time?

I think that in the context of my first career, the title of the book should read, Do What You Love, and You Will Slowly Be Driven Insane. Such a title describes what was happening with my career as a clarinetist.

The book title implies a privilege. Some people in this world, in this country and city, do what they do not like because they must. They may work as janitors not because that is their desired job but because it pays the bills and feeds their family. I do not want to impute any magic to my current success in this job that I love. I was lucky. Things worked out. I enjoy what I do. I feel very lucky. But I do not think Sinetar’s advice is universally generalizable.

2015-03-27 Power and status significantly impact judgment and decision making.

 

 

 Dr. Nathanael Fast

nathanaelfast.com

 

Assistant Professor of Management and Organization, Marshall School of Business,

University of Southern California

 

 

 Power and status impact judgment and decision making.

 

A graduate of the Stanford University Program in Organizational Behavior, Professor Fast studies the effects of power and status on behavior, judgment and decision making, and the psychological foundations of culture. An experienced social entrepreneur, he has co-founded three nonprofit organizations addressing community and economic challenges in California’s Central Valley. His research has been referenced in a variety of business media including Business Week, Economist, Financial Times, and CNN.

1.  Your most prominent research to date focuses on how power in organizations affects judgment and decision-making. Can you give us an overview of this research? What initially attracted you to this area of inquiry?

A lot of my work is focused on trying to understand how having or lacking power changes individuals’ perceptions, attitudes, and decision-making. People often like to point to the common saying “power corrupts,” especially when observing a leader who makes a bad decision, but I wanted to understand the relationship between power and behavior more systematically. So my colleagues and I have been using scientific methods to unpack the various psychological consequences of power on those who have it. We’re finding that the effects have the potential to be adaptive in some cases and maladaptive in others. For example, one set of studies with Deb Gruenfeld, Niro Sivanathan, and Adam Galinsky reveal that power increases the tendency to experience illusory control. That’s adaptive in the sense that it gives people the gumption to act boldly and keep going when times get tough. However, it can also lead to an overestimation of one’s abilities when accuracy is important, leading to undesirable outcomes. More recently, I’ve been studying how power, in the form of control over resources and outcomes, interacts with things like self-perceived competence and social status to influence behavior.

I’ve been interested in power for as long as I can remember. One of my first memories of this interest was when I was a kid in Zaire (now the Congo), where my dad was a volunteer doctor. We lived there during the dictatorship of Mobutu Sese Seko and the notion that a leader would abuse and even kill those who disagreed with his policies was alarming to me. Ever since, I’ve been fascinated by the factors that predict whether leaders will abuse power or use it to benefit others.

 

 

2.   Bullying has historically been a problem in the Japanese public school system, one that has been linked to the suicides of some victims. Based on your research, what would you suggest to principals and policy makers for eradicating bullying in Japan? What, if anything, can the victims do to defend themselves? What can bullied employees do to improve their plight?

Bullying is a really big and complicated issue. One thing that has helped – and organizations like the Workplace Bullying Institute have led the way in this regard – is to name it. By giving bullying an official name, it becomes something that both victims and policy makers can point to as a problem that needs to be fixed. Another thing that individuals who are experiencing bullying can do is take some time away from the situation to collect their thoughts and come up with a strategy for how to deal with the situation. Resources like the Workplace Bullying Institute are helpful for those wanting to figure out their options. It’s then helpful to take the issue to the right people and frame it in terms of the organization’s self-interest rather than as an individual problem. It’s also very helpful to take that step as a group of people, rather than as an individual. It’s quite easy and tempting for higher-ups to simply blame the victim and label them as overly sensitive, but this is impossible to do when the message about bullying comes from a whole group of employees who care about the well being of the organization. As far as what policy makers can do, the first steps are to give it a name and raise public awareness of the problem.

 

3.   I was intrigued by your research described in the March 10, 2009, Time article on the illusion of personal control that power creates. Quoting you and your co-author Deborah Gruenfeld, the article notes, “Power may cause people to lose touch with reality in ways that lead to overconfident decision-making.” Can you tell us the circumstances under which this outcome is likely? What can companies do reduce the likelihood that those in positions of power will render over-confident decisions? What can those in power themselves do?

A few factors can make the illusory control stronger, like repeated successes and being surrounded by people who are unwilling to challenge the leader. When we never experience failure or opposition, we stop feeling the need to deliberate the pros and cons of a particular decision. So companies need to foster deliberative thinking among those in power. Those at the top can help themselves by becoming conscious of the tendency to experience illusory control as well as reminding themselves of their inadequacies and surrounding themselves with people who will be honest with them.

 

4.   When I first read about your research suggesting that the reason people may remain popular long after their has talent faded—if ever they had any to begin with—stems from the human desire to find common ground in conversations, a shared topic of interest, I was incredulous. Can you tell us about this research? Do you think the results would also be valid in a country like Japan, where the culture is vastly different from the West? What are the implications of these research findings for businesses?

We wanted to test a simple hypothesis—that the psychological tendency for people to form bonds by talking about things they have in common underlies the sociological finding that prominent ideas and people persist in popular culture longer than they “should” based purely on merit. We found that baseball players received more All-Star votes and accolades when their names had been mentioned in the media in prior years, controlling for performance. The tendency for people to talk about these players in online chat rooms was the mechanism that drove this effect. Interestingly, the one group of people that showed a different pattern was baseball “experts” (i.e., fans that know a lot about baseball). They tended to talk about the more interesting, higher-performing players, but only when they knew they were talking with another expert. In short, a lot of prominent ideas and celebrities might exist simply because they give us a way to connect with other people. It would be interesting to look at potential differences for this effect among individualistic and collectivistic cultures. That’s not something we’ve done yet.

 

5.   Research you published in The Journal of Experimental Social Psychology, suggested that blaming is contagious in organizations. To control this contagion, you suggest rewarding employees for their mistakes in a 2010 HBR blog article. Could you give us examples of some companies that have introduced such reward systems? What have been the benefits of the systems? How has their business impact been measured?

Of course it’s important to encourage the right kind of mistakes—those that foster learning that improves future performance. There are a number of companies that take a novel approach to failures. India's Tata group gives an annual prize for the best failed idea. Intuit, Eli Lilly, and P&G all view failures as an integral part of their businesses. The benefit of this approach is that it fosters a climate of psychological safety and, as Amy Edmondson shows through extensive research, this leads to better overall performance.

 

6.   I understand that you lived in North America, Europe, and Africa as you grew up. How were you able to live on three different continents as a child? Can you tell us about your experiences in Europe and Africa? How have they shaped your perspective of America? How have your life experiences influenced your research?

My dad was a doctor who loved to travel as well as help others, so he signed up to volunteer with an organization similar to Doctors Without Borders. In Belgium I went to an all French-speaking school and in the Congo, my siblings and I were the only Caucasian kids in the village. Those experiences forced me to become an avid student of individuals and groups to try to understand the underlying norms and principles that guide people’s behaviors. That led to a life-long interest in doing research that helps uncover the underpinnings of human behavior. Living abroad was a neat experience and I’m still thankful for that opportunity.

 

2015-02-28 - Improving Creativity and Productivity through the Psychology of Inner Work Life

 

Professor Teresa M. Amabile

Improving Creativity and Productivity through the

Psychology of Inner Work Life

Teresa Amabile, Edsel Bryant Ford Professor of Business Administration in the Entrepreneurial Management Unit and Director of Research at Harvard Business, shares her thoughts. Originally focusing on individual creativity, Dr. Amabile's research has expanded to encompass individual productivity, team creativity, and organizational innovation.

 

A prolific researcher, Professor Amabile has published over 100 scholarly articles and chapters and several books as well. She is also active as a consultant with leading organizations including Procter & Gamble, Novartis International AG, Motorola, IDEO, and the Creative Education Foundation

 

1. Your Componential Theory of Creativity has received critical acclaim. Can you give us an

overview of this model citing concrete examples of each component? How could managers a

pply it in the workplace to enhance employee creativity?

My componential theory of creativity says there are three components that any individual needs in order to be creative, and one external component, as well. Let me start with the internal components. The first is expertise in the domain where the person is trying to be creative. In a business context, let’s think of someone who needs to solve a marketing problem, maybe needs to conceive of a plan for launching a new product. That person’s expertise in the domain is everything that they know, everything that they have the ability to do, in the marketing domain. That would include the person’s formal education in business, specifically in marketing. Expertise would include their exposure to similar problems in the past: their experience working on these problems, talking with others informally about product launches, paying attention to anything in the environment that they could learn about marketing product launches. There are probably some elements of domain expertise that are inborn. That is, some individuals may be naturally better able to think about problems like this, but to a large extent, this expertise depends on formal and informal education and experience. Domain expertise is the first component.

The second component, creative-thinking skills, is general across different domains where the person is working or solving problems. This is what most people think of as creativity. Creative-thinking skills include ways of thinking, ways of taking new perspective on problems, ways of looking at things, that can lead to new associations between ideas or lead to the generation of new ideas. For example, some people are very able turn problems on their head, assume perspectives that others will not take on the problem. These individuals are better able to take reasonable risks in solving problems, because they are willing to look at things in a way that no one else (or few other people) will. These creative people are also able to persevere when a problem is difficult, really dig into it, explore for new options, brainstorm a wide variety of ideas; then, they are able to winnow down to the best ideas. These personality traits and skills are partially inborn, but they can be trained; they can be learned to a large extent. This is what so many of the creativity-training programs, like creative problem solving (CPS), Synectics, TRIZ, and so many other programs are oriented toward – specifically training people in broad, creative-thinking skills.

The third individual component of the theory is the one I focus on most in my research. That component is intrinsic motivation, the motivation to do something because it is interesting, enjoyable, personally challenging, personally satisfying to the individual. The opposite of intrinsic motivation is extrinsic motivation. That is being motivated by money and pay, promotions, recognition, a deadline, the motivation to do well in competition, to receive a good evaluation. All of these are external motivators; they are separate from the nature of the work itself. We are all oriented toward both intrinsic and extrinsic motivation. We have both types of motivation in the work that we do. But for someone people, intrinsic motivation is more prominent; for others, extrinsic motivation is more prominent. But again, this is something that only partly depends on an individual’s own inborn characteristics. To a large extent, intrinsic motivation depends on the immediate social environment in which the person is working. This is a very important point.

That leads me to the fourth component: the work environment. This is the external component, outside the individual. The key question about this component is, “Does the work environment support the person’s intrinsic engagement in the work, or does the environment load them up with so many extrinsic motivators and constraints that it detracts from their intrinsic motivation, leaving them feeling less intrinsically motivated in their work?” Through decades of experimental research, along with survey and observational research inside companies, we’ve found what we call the intrinsic motivation principle of creativity: people are more likely to be creative when they are motivated primarily by intrinsic motivation – by the enjoyment, interest, personal challenge and satisfaction of the work – itself rather than extrinsic motivators.

Returning to our marketing example, in a business context, the person obviously needs skills in the marketing domain. They also need creative skills, the ability to take new perspectives on problems and to persevere when the problem becomes difficult. They need to be intrinsically motivated about the problems they are tackling, too. They need to feel that there’s something gripping about these problems. In large part, this intrinsic motivation will depend on the work environment: what’s going on in their immediate work group, what their supervisor is saying to them, and what is occurring inside the organization-what the culture is like. A lot of my research has looked at what managers can do to support intrinsic motivation (as well as what managers often do that undermines intrinsic motivation). My more recent research has expanded beyond intrinsic motivation to look at people’s emotions and perceptions in their work as well.

 

2. A summary of the summit on “Creativity and Entrepreneurship in the Global Environment”

that you moderated indicated that both start ups and large organizations engage in

entrepreneurship, but their particular challenges are different.

 

A.  How would you define entrepreneurship in the first place, differentiating it from creativity and innovation?

Creativity is the production of new, useful ideas. Innovation is the successful implementation of those ideas by an organization by, for example, commercializing a product that resulted from the creative ideas of individuals in R&D. Entrepreneurship is recognizing and seizing opportunities that may initially exceed the reach of resources currently controlled by a person or organization. Stated another way, entrepreneurship involves looking for opportunities, then determining how to seize those opportunities without being overly constrained by current resources.

Entrepreneurship requires creativity in at least two arenas. Creativity is first exercised in recognizing opportunities. This applies to both start-ups and big companies pursuing opportunities. Being able to recognize opportunity requires the ability to perceive the world creatively. The second aspect of entrepreneurship that requires creativity is the process of marshaling the resources, finding inventive ways to acquire the resources that allow you to pursue opportunities.

 

B.  What recommendations can you make for encouraging entrepreneurship in risk-averse nations like Japan?

 

Overcoming risk aversion is difficult, but people in organizations can take several measures that may help. For example, more mature employees can keep in touch with people who are young. They could be junior employees, if you are a manager or executive, or simply younger co-workers if you are a staff employee. Because younger employees often have very different perspectives, you should listen to them; you can learn from them. Younger employees may also be more in tune with current opportunities. Keeping an open mind about ideas that are new and different, and maintaining an open attitude toward youth culture, can help overcome risk aversion.

3. Would you be open to opportunities to facilitate workshops or deliver lecturers in Japan?

 

Absolutely! I have never been to Japan, and I would love to visit.